Murphy USA Inc. operates a chain of retail stations offering motor fuel products and convenience merchandise. The company was founded in 2013 and is based in El Dorado, Arkansas.
MUSA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MUSA, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Murphy USA Inc ranked in the 71th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for MUSA, they are:
Murphy USA Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 19.68% of tickers in our DCF set.
MUSA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 19.68% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Murphy USA Inc has a reliance on debt greater than only 23.65% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as MUSA, try GLXZ, MGA, SNBR, TSCO, and VIAC.
Canadian convenience store operator Alimentation Couche-Tard Inc, Japanese peer Seven & i Holdings Co and private equity firm TDR Capital are preparing to submit rival bids this week for Marathon Petroleum Corp's gas station network Speedway, according to people familiar with the matter. It is Marathon's second attempt this year to divest Speedway after negotiations with Seven & i, parent of the 7-Eleven convenience store chain, over a $20 billion-plus deal collapsed in March as the novel coronavirus spread in the United States. Speedway could now fetch between $15 billion and $17 billion, amid lower road traffic during the pandemic, the sources said.
Ladies and gentlemen, thank you for standing by, and welcome to the Murphy USA second-quarter 2020 earnings conference call. With me, as usual, are Andrew Clyde, president and chief executive officer; Mindy West, executive vice president and chief financial officer; and Donnie Smith, vice president and Controller.
Over the past three months, shares of Murphy USA Inc. (NYSE: MUSA) increased by 22.72%. Before having a look at the importance of debt, let's look at how much debt Murphy USA has.Murphy USA's Debt Based on Murphy USA's balance sheet as of April 30, 2020, long-term debt is at $987.40 million and current debt is at $51.20 million, amounting to $1.04 billion in total debt. Adjusted for $200.30 million in cash-equivalents, the company's net debt is at $838.30 million.Investors look at the debt-ratio to understand how much financial leverage a company has. Murphy USA has $2.58 billion in total assets, therefore making the debt-ratio 0.4. Generally speaking, a debt-ratio more than 1 means that a large portion of debt is funded by assets. As the debt-ratio increases, so the doe...